Who is a Non-resident Indian?
A: An Indian citizen who stays abroad for employment/carrying
on business or vocation outside India or stays
abroad under circumstances indicating an intention
for an uncertain duration of stay abroad is a
non-resident. (Persons posted in UN organisations
and officials deputed abroad by Central/state
governments and public sector undertakings on
temporary assignments are also treated as non-residents).
Non-resident foreign citizens of Indian origin
are treated on par with non-resident Indian citizens
Q. Who is a person of Indian origin?
in immovable properties A foreign citizen (other
than a citizen of Pakistan, Bangladesh, Afghanistan,
China, Iran, Bhutan, Sri Lanka, or Nepal) is deemed
to be of Indian origin if, (i) he held an Indian
passport at any time, or (ii) he or his father
or paternal grand-father was a citizen of India
by virtue of the Constitution of India or the
Citizenship Act, 1955 (57 of 1955).
Q: What is an OCB?
A: Overseas Corporate
Bodies (OCBs) are bodies predominantly owned by
individuals of Indian nationality or origin resident
outside India and include overseas companies,
partnership firms, societies and other corporate
bodies which are owned, directly or indirectly,
to the extent of atleast 60 per cent by individuals
of Indian nationality or origin resident outside
India as also overseas trusts in which atleast
60 per cent of the beneficial interest is irrevocably
held by such persons. Such ownership interest
should be actually held by them and not in the
capacity as ~ nominees. The various facilities
granted to NRIs are also available with certain
exceptions to OCBs so long as the ownership/beneficial
interest held in them by NRIs continues to be
atleast 60 per cent.
Q: Are OCBs required
to produce any certificate regarding ownership/beneficial
interest in them by NRIs?
A: Yes. In order
to establish that the ownership/beneficial interest
in any OCB held by NRIs is not less than 60 per
cent, the concerned body/trust is required to
furnish a certificate from an overseas auditor/chartered
accountant/certified public accountant in form
OAC where the ownership/beneficial interest is
directly held by NRIs, and in form OAC 1 where
it is held indirectly by NRIs and further that
such ownership interest is actually held by them
and not in the capacity as nominees.
Q: What are the
various facilities available to NRIs/OCBs?
A: NRIs/OCBs are
granted the following facilities :
Maintenance of bank
accounts in India.
Investments in securities/shares of, and deposits
with, Indian firms/companies.
Investments in immovable properties in India.
INVESTMENT IN IMMOVABLE PROPERTY
Q: Do non-resident
Indian citizens require permission of Reserve
Bank to acquire residential/commercial property
A: No. An Indian
citizen resident outside India does not require
any permission to acquire any immovable property
in India other than agricultural/plantation property
or a farm house. However the purchase consideration
should be met either out of inward remittances
in foreign exchange through normal banking channels
or out of funds from NRE/FCNR accounts maintained
with banks in India.
Q: Do foreign citizens
of Indian origin require permission of Reserve
Bank to purchase immovable property in India for
their residential use?
A: Reserve Bank
has granted general permission to foreign citizens
of Indian origin, whether resident in India or
abroad, to purchase immovable property other than
agricultural land/farm house/plantation property,
in India. They are, therefore, not required to
obtain separate permission of Reserve Bank or
file any declaration.
Q: In what manner
the purchase consideration for the immovable property
should be paid by foreign citizens of Indian origin
under the general permission?
A: The purchase
consideration should be met either out of inward
remittances in foreign exchange through normal
banking channels or out of funds from any non
resident accounts maintained with banks in India.
Q: Can such property
be sold without the permission of Reserve Bank?
A: Yes. Reserve
Bank has granted general permission for sale of
such property. However, where the property is
purchased by another foreign citizen of Indian
origin, funds towards the purchase consideration
should either be remitted to India or paid out
of balances in non-resident accounts maintained
with banks in India.
Q: Can sale proceeds
of such property if and when sold be remitted
out of India?
In the event of
sale of immovable property other than agricultural
land/farm house/plantation property in India by
a person resident outside India, who is a citizen
of India, or a person of Indian origin, the authorized
dealer may allow repatriation of the sale proceeds
outside India, provided all the following conditions
the immovable property
was acquired by the seller in accordance with
the provisions of the Exchange Control Rules/Regulations/Law
in force at the time of acquisition, or the provisions
of the Regulations framed under the Foreign Exchange
Management Act, 1999;
the sale takes place after three years from the
date of acquisition of such immovable property
of from the date of payment of final installment
of consideration for its acquisition, whichever
the amount to be
repatriated does not exceed(a) the amount paid
for acquisition of the immovable property in foreign
exchange received through normal banking channels
or out of funds held in foreign currency non-resident
account or (b) the foreign currency equivalent,
as on the date of payment, of the amount paid
where such payment was made from the funds held
in non-resident external account for acquisition
of the property; and in the case of residential
property, the repatriation of sale proceeds is
restricted to not more than two such properties.
In all other cases prior permission 9 RBI is required
Q: Can foreign citizens
of Indian origin acquire or dispose of residential
property by way of gift?
A: Yes. Reserve
Bank has granted general permission to foreign
citizens of Indian origin to acquire or dispose
of immorelde properties other than agricultural
land/farmhouse/plantation property by way of gift
from or to a relative who may be an Indian citizen
or a person of Indian origin whether resident
in India or not.
Q: Can NRI's/PIO's
rent out the properties (residential/commercial)
if not required for immediate use?
A: Yes. Reserve
Bank has granted general permission for letting
out any immovable property in India. The rental
income or proceeds of any investment of such income
is eligible for repatriation
Q:Can NRIs obtain
loans for acquisition of a house/flat for residential
purpose from financial institutions providing
A: Reserve Bank
has granted general permission to certain financial
institutions providing housing finance e.g. HDFC,
LIC Housing Finance Ltd., etc., to grant housing
loans to non-resident Indian nationals for acquisition
of a house/flat for self occupation subject to
certain conditions. The purpose of loan margin
money and the quantum of loan will be at par with
those applicable to housing loans to residents.
Repayment of loan should be made within a period
not exceeding 15 years out of inward remittances
or out of funds held in the investor's NRE / FCNR
/ NRO Accounts.
Q: Can authorised
dealer grant loans to NRIs for acquisition of
a flat/house for residential purposes?
A: Authorised dealers have been granted permission
to grant loans to non-resident Indian nationals
for acquisition of house/flat for self-occupation
on their return to India subject to certain conditions
Repayment of the loan should be made within a
period not exceeding 15 years out of inward remittance
through banking channels or out of funds held
in the investors' NRE/FCNR/NRO accounts.
Q: Can authorized
dealer grant housing loan to non-residents of
Indian originality where he is a principle borrower
with his resident close relative as a co-obligent
/ guarantor or where the land is owned jointly
by such NRI borrower with his resident close relative?
A: Yes. However,
in such cases, the payment of margin money and
repayment of the loan installments should be made
by the NRI borrower.
Q: What are the
guidelines for acquisition of agricultural land
/ plantation property / farmhouse by NRIs and
foreign citizens of Indian origin?
A: All requests
for acquisition of agricultural land / plantation
property / farm house by any person resident outside
India may be made to The Chief General Manager,
Reserve Bank of India, Central Office, Exchange
Control Department, Foreign Investment Division
(III), Mumbai 400 001.